The Master Budget Contains Which Two Classes of Budgets

question 46

Multiple Choice

The master budget contains which two classes of budgets?

• A)the master budget and subsidiary budgets
• B)the primary and secondary budgets
• C)the historical and current budgets
• D)the operating budgets and financial budgets

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Definitions:

Fixed Manufacturing Overhead

Costs related to manufacturing that do not change with the level of production, such as rent, salaries, and utilities.

Direct Labor

Labor that is directly involved in the creation or production of goods, distinguishable from indirect labor such as administrative work.

Raw Material

The basic material from which a product is made, often used in manufacturing and production processes.

Labor Efficiency Variance

The difference between the actual hours of labor worked and the expected (or standard) hours, multiplied by the standard hourly labor rate.